Gold: 'This is the perfect storm'

NEW YORK (CNNMoney) -- Gold prices have hit a series of record highs this week, as a combination of inflation worries, a weaker U.S. dollar and geopolitical turmoil have weighed on investor confidence.

On Friday, gold futures for June delivery were up $15.40, or 1%, to $1,474.90 an ounce, a day after the contract settled at a nominal all-time high of $1,459.30 an ounce.

Top of the list is inflation, which has been rising sharply in emerging economies and is becoming more of an issue in Europe. Gold is seen as a hedge against inflation because tangible assets like precious metals tend to hold their value better than stocks or bonds when prices are rising. As such, gold prices often rise when investors see inflation on the horizon.

Dallas Federal Reserve president Richard Fisher, the U.S. central bank's most vocal inflation hawk, said Friday that "there is the risk that we might breach our duty to hold inflation at bay." However, other Fed officials, including chairman Ben Bernanke, maintain that inflation remains tame enough to keep rates low for some time.

In addition to inflation worries, traders said gold prices are being supported by a weak U.S. dollar. The dollar index, which measures the greenback against a basket of other international currencies, fell to a 16-month low on Friday.

A softer dollar typically boosts prices for commodities that are priced in the U.S. currency, such as gold and crude oil, because it makes them more lucrative for buyers using other currencies.

As if that weren't enough, a host of geopolitical concerns continue to boost demand for gold as a safe haven.

Turmoil in the Middle East has roiled the markets this year and the bloody stalemate in Libya threatens to draw Western powers into a quagmire. Japan, reeling from last month's natural disasters and ensuing nuclear crisis, was hit by another major earthquake Thursday.

Gold is seen by many investors as the best place to park money when the economic or political outlook is uncertain. And given the meager yields on U.S. Treasury bonds, also considered a safe haven, there is little competition for gold.